KeyLeaf Life Sciences
Today, Canopy Growth announced that it acquired the Saskatchewan-based KeyLeaf Life Sciences along with entities relating to the company and its intellectual property. With this acquisition, Canopy Growth will have access to the KeyLeaf plant-based extraction facilities in Canada and the US. Canopy intends to use the US extraction facility for its CBD products.
In today’s announcement, Canopy Growth stated that the KeyLeaf acquisition “will support Canopy Growth in the design, training, oversight, and implementation of additional extraction sites around the world.”
As Canopy Growth focuses on more high-margin products, the above extraction facility should give the company extracts it can use in edibles.
On June 24, Canopy Growth received a licence from Health Canada to grow cannabis at its outdoor facility in the Province of Saskatchewan, which has a capacity of about 7 million square feet or about 160 acres. Check out Canopy Growth Gets License for Outdoor Facility in Saskatchewan.
Just yesterday, we issued our report discussing how Canopy Growth Plans to Deploy Cash from Constellation Brands, in which we discussed the potential areas of acquisition for the company. Particularly, we discussed how the company no longer intends to purchase smaller producers—yet the acquisition remained a top priority. We concluded that Canopy Growth will likely continue to acquire companies that have the intellectual property for cannabis derivative products that command a higher margin.
The above acquisition is a testimony to that assessment we published yesterday. Canopy Growth (WEED) was trading down 1% while Aurora Cannabis (ACB) gained 1% at the time of this writing. Aphria (APHA) was trading 1% higher while the ETFMG Alternative Harvest ETF (MJ) was down 0.4%.